In the meantime, I took the time to install Windows XP and I am seeing your problem. Apparently the launch immediately terminates for some reason that I have not yet been able to track down. So I don't have any clue (yet) how to solve this.

To get Forge to work from the command prompt I also had to apply a service pack though. This was a JLine issue because JLine apparently uses some dll that is not installed in XP by default. I am suspecting the problem we are seeing is also due to something similar.

I have tracked down the problem and it seems it is caused by spaces in the modulepath when Forge is started. I have created https://issues.jboss.org/browse/JBIDE-9882 and will try to solve it by the end of the week.